An independent journal about the Gannett Co. and the news industry's digital transition

Tuesday, January 25, 2011

Google plans to boost employment 25% this year

Moving deeper into fields once dominated by Gannett, such as local advertising, the search engine giant disclosed today that it plans to hire at least 6,000 additional workers this year on top of the 24,400 it already employs.

The hiring pace should make 2011 the biggest year for employee growth in Google history, Alan Eustace, senior vice president of engineering and research, said in a blog post. Founded in 1998, Google hired more than 4,500 last year, making that year second only to 2007, when the company added more than 6,000, according to Bloomberg News.

Google's disclosure follows a published report that GCI cut as many as 8,000 jobs in its U.S. newspaper division alone last year. If true, that would have reduced GCI's overall employment to about 27,000 across all divisions. As recently as 2005, GCI employed 52,600 worldwide.

GCI typically discloses employment figures by major division only once a year, in a so-called 10-K report to the U.S. Securities and Exchange Commission. Those reports are filed toward the end of February. Here's the 10-K filed in February 2010.

Current employees: Do you expect to be working for GCI by the end of 2011? Post replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

28 comments:

1. Gannett will be at 27,500 employees by end of 2011.2. Broadcast Division will announce layoffs along with USCP post Q1 furloughs this year. This will be the biggest restructuring that Gannett has ever gone through.3. Search for Chief Digital Officer has been shelved.

So are the USCP layoffs going to be in addition to all the design/copy editing layoffs during the transition to the Design Centers? If so, who's going to be left? It's already down to mostly reporters, editors and photographers. Guess advertising and production will be on the hook again too.

Jim,I think My Boss is correct. In 2009, Gannett ended with 35,000. You will shortly see in the annual report that the company is down to 31,000. It is not unrealistic for the company to end 2011 down an additional 3,500.

Personally, I hope I'm not here by the end of 2011. It's not that I'm badly paid or badly treated. But there are few opportunities left for change or advancement. The quality of the "reporting" has declined to such a point that it's embarrassing. Customer service is non-existent, and the GPC and COE and CSS and MOUSE are only making it worse. The company is top heavy. Local sites no longer have much control over anything they do. Newspapers are becoming ghost towns, and it doesn't have to be that way. Look at the numbers. The more layoffs there are, the less quality and quantity in the paper, the more the circulation drops. It's not about digital, it's about quality. Put out a quality product, people will buy it, whether it's online or in print. Put out a crappy product, and it won't sell. That's basic business, but it's a concept lost in the CP. I love newspapers, I've enjoyed working in the industry, but I just don't see a future in it for me anymore. At some point, Gannett will eliminate my position, either outsourced or centralized, whichever comes first.

Most of these concerns would not be as big of an issue had the CEO not borrowed billions to buy overpriced stock. Doesn't that seem silly to borrow money you don't have on hand to buy stock? It's one thing if a company has the cash on hand like Apple to buy back the shares (rewarding investors) and it's another if they borrow the money. Logic concludes that this type of financial transaction would merely inflate or maintain current share prices for a temporary period of time while ultimately driving down the share price over time due to the addition of base cost plus interest ($2 billion + interest). This is the equivalent of you or me taking out a loan and immediately sticking the money in a paper shredder.

Jim you should see if any (how many and who) sold shares between the time that the buyback was announced and occurred and when the stock crashed. Jim, the more I think about this aspect, it really has been the catalyst for all of the sweeping cuts we've seen. Sure, there would have been cuts, but without that heinous debt and interest expense lingering overhead, the cuts would have surely been less severe.

$2 billion would have paid for a LOT of new media training and additional local coverage.

11:28 wrote: "Jim you should see if any (how many and who) sold shares between the time that the buyback was announced and occurred and when the stock crashed." By "any," do you mean any senior executives?

Also: "Jim, the more I think about this aspect, it really has been the catalyst for all of the sweeping cuts we've seen." Absolutely agreed on this.

Also worth noting: This buyback scheme also was very much the handiwork of the then-chief financial officer and now COO: Gracia Martore. And it had the rubber stamp of the dopes on the board of directors.

IMO, stock buyback plans don't produce immediate results for GCI, or for other companies. The incentives are so rich for executives to cash out their stock options when the stock goes up, that buyout plans are very common. But they don't work to boost stock prices as well as raising the dividend. That's because while buybacks may be announced, they are often not completely carried through. But raising the dividend is a commitment and woe behold the stock if the dividend doesn't match what was promised. This a long-winded way of saying that I think what is happening with GCI is really paving the way towards boosting the dividend again. Of course, building the profits is costing GCI revenue growth, which we saw in Q3, and I expect will see Jan. 31.

If My Boss is correct, and the plan for a new chief digital officer are shelved, it is worse than sad. It is an outrage. The board of directors have made it clear they want the new CDO to be groomed to be the next director of the company, so Gracia is doing everything she can to sabotage the selection. The board of directors need to see through this, and force a decision. Gracia is just trying to secure her own future. The CDO is a job that eventually will bring someone a salary of $4 million a year, plus bennies. There is no way they can't find someone who wants to make that sort of money.

Wow. 27,500 means a larger reduction than previously outlined. With the expected decline in revenues, how are they going to possibly justify this? Also, broadcast has already taken a huge hit, and about the only way I can see how further reductions can be made is to run TV operations from newspaper newsrooms.

Demand Media just went public today on the stock exchange, and is selling for $26 a share, or 34 percent over the initial $17 offer. That tells you investors believe there is money to be made out there peddling timeless stories bought for $15 each.The question I have is GCI has a whole archive filled with timeless stories. Surely these could be mined for something? Demand has to buy its stories. GCI already owns the ones it is sitting on.

What if Google buys Gannett? Didja ever think of that? Some in the investing community HAVE thought about it, though for some reason McClatchy is the Google acquisition target more often named. Discuss amongst yourselves. But don't unreasoningly discard it out of hand just because you dislike Gannett. The market neither knows nor cares about your feelings. Or mine.

A case can be made -- if for no other reason than Larry, Sergey and Eric want to forestall claims that the Goog has done evil by killing the newspaper biz. And you know how Google feels about doing evil, right? Stranger things have been done in the name of public relations.

And the money? Hah! Gannett's market cap at 10 a.m. Central on Jan. 26 of $3.59 billion is Google's equivalent of the $50 that constitutes walking around money for you and me. OK, not quite, but nearly.

I can see Demand Media buying Gannett, but why on earth would Google be interested. Google has made its money from selling ads on its search engine results, a simple idea. Why buy GCI or any other content-producer? It is making a mint out of what it is doing, and doesn't need newspapers. If it wants to get into content, it also has the money to do it itself.Demand Media, on the other hand, is making its money from being a vendor to a dying industry, plus selling ads off its content. I frankly don't see this company has much of a future and find the price way out of line with its future prospects. But then I'm not smart enough to be a Wall Street billionaire, and so my views can be discounted.

To see a preview of Gannett's apparent strategy, just review the history of Clear Channel Communications.

The largest owner of radio stations in the U.S. slashed local staffs, substituted syndicated content -- and prospered. The lesson: If you cut costs enough, even a reduced media footprint can make you good money.

But CC Media Holdings got caught up in debt problems, too (by borrowing to take the company private). This year, they even let slip the B-word -- though bankruptcy seems to be in the past now.

Plenty of people thought that local radio audiences would never tolerate local stations with almost no local content or personalities. But Clear Channel demonstrated otherwise.

Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."